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In a unanimous opinion (except for Justice Kavanaugh, who was recused from the case) expected to have broad implications for the transportation industry, the Supreme Court delivered a blow to employers that seek to arbitrate claims filed by drivers and other transportation workers classified as independent contractors.

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The high court affirmed a decision from the First Circuit Court of Appeals that an exemption in the Federal Arbitration Act for interstate transportation workers applies to all workers, whether classified as employees or independent contractors. The employer, New Prime Inc., an interstate trucking company, sought to compel arbitration of claims by one of its drivers, Dominic Oliveira, who filed a class action in federal court alleging New Prime violated the Fair Labor Standards Act by denying its drivers lawful wages.

After the district court and the First Circuit sided with the driver, New Prime petitioned the Supreme Court to overturn the First Circuit’s May 2017 ruling that the term “contracts of employment” in the Section 1 exemption of the FAA includes not only employees, but also independent contractors. New Prime’s broad arbitration agreement included a “delegation clause” that gave an arbitrator authority to decide whether the parties’ dispute is subject to arbitration.

The Supreme Court nonetheless agreed with the First Circuit that a court, rather than an arbitrator, should determine whether the contract in question is within the coverage of the FAA, citing the Court’s 1967 Prima Paint decision. Turning to the interpretation of “contracts of employment” in the FAA exemption, the Court employed the “ordinary meaning” analysis of the statute’s language to conclude the term is not limited to employees because at the time Congress enacted the FAA in 1925, “contract of employment” described “any contract for the performance of work by workers.” Justice Ginsburg filed a short concurring opinion.

Janet A. Hendrick

If you have questions about this decision, contact Janet Hendrick, who regularly represents employers in court and arbitration, in the Dallas office of Phillips Murrah at (214) 615-6391 or at jahendrick@phillipsmurrah.com.

Disability is the most common and well-known basis for workplace accommodation. Although less common, requests for religious accommodations for an employee’s sincerely held religious beliefs or practices, required by Title VII of the Civil Rights Act of 1964, are on the rise. Here is an overview of what employers should know about religious accommodations.

Under Title VII, “religion” is not limited to traditional, organized religions. Sincerely held religious beliefs are also included, even if not part of a formal church or sect, and even if held by a small number of people. One court found that a belief system known as Onionhead, the motto of which is “peel it-feel it-heal it,” is a religion, looking to the Equal Employment Opportunity Commission’s definition, which includes “moral or ethical beliefs as to what is right and wrong.” In contrast, another court ruled that the Church of the Flying Spaghetti Monster, members of which are known as Pastafarians, is not.

Upon request or notice, an employer must engage in an interactive process with the employee and accommodate the employee’s religious beliefs or practices unless it would pose an undue hardship on the employer. The burden is on the employee to prove notice was provided to the employer. Mere knowledge by the employer does not generally trigger an accommodation obligation.

To establish an undue hardship, an employer must provide specific and credible evidence of the expense or hardship the exception would cause. Hypothetical hardships without support will not suffice. A “slippery slope” argument – that accommodating one employee will encourage others to request a policy exception – rarely succeeds.

Although it is an easier standard to meet than the undue hardship exception to a disability accommodation under the Americans with Disabilities Act, there is no bright-line rule and each case will be different. Examples of burdens that are more than minimal are jeopardizing safety or health, more than a minimal cost, and violating a seniority system.

The two most common religious accommodations are schedule changes and exceptions to dress and grooming codes. Examples are an employee who is unable to work Saturdays because his religion prohibits working on his Sabbath, a female Muslim employee whose religion requires her to wear a hijab, or a male employee who is prohibited by his religion from shaving his beard.

Janet A. Hendrick is an employment attorney who works in Phillips Murrah’s Dallas office.